NextSource Materials Inc (NEXT) AI Stock Analysis

• Market Cap: C$54.55M
• Dividend Yield: N/A
• Average Volume (3M): 137.38K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.25
• Revenue Growth: N/A
• EPS Growth: -57.70%
• Country: CA
• Employees: 118
• Sector: Basic Materials
• Sector Strength: 59
• Industry: Industrial Materials
• EPS (TTM): -0.03
• Shares Outstanding: 184,911,100
• 10 Day Avg. Volume: 240,595
• 30 Day Avg. Volume: 137,384
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 805.69
• Price to Cash Flow (P/CF): -1.40
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 1

NextSource Materials Inc. struggles with significant financial challenges, including persistent losses and high leverage. Technical indicators show a bearish trend, and valuation metrics are unfavorable due to negative earnings. Despite strategic partnerships and liquidity improvements highlighted in the earnings call, the company faces market oversupply and operational delays, resulting in a low overall stock score.

Positive Factors

Commercial Sales

First commercial concentrate sales are expected this quarter, with nameplate capacity of 17ktpa expected to be achieved within the next 12 months.

Strategic Positioning

NEXT's staged, vertically integrated development plan combined with an exclusive partnership secures established anode processing IP, positioning the company as a potential near-term ex-China producer at a time when the electric vehicle battery supply chain is seeking diversification.

Negative Factors

Environmental Permits

The environmental impact assessment process for the Mauritius BAF remains ongoing, creating uncertainty regarding the required permits.

Financial Needs

Current cash balance is approximately US$11M, and it is expected that NEXT will require additional funding in the near term, assuming a US$10M equity raise.

Operational Challenges

The company continues to experience ramp-up challenges at Molo and is working to stabilize and optimize plant operations while balancing ramp-up with market demand.

NextSource Materials Inc Business Overview & Revenue Model

Company Description

NextSource Materials Inc. acquires, explores for, and develops mineral properties in Madagascar and Canada. The company primarily explores for graphite and vanadium deposits. Its principal mineral property is the Molo graphite mine that includes 2,119 permits covering an area of 827.7 square kilometers located in Southern Madagascar Region, Madagascar. The company was formerly known as Energizer Resources Inc. and changed its name to NextSource Materials Inc. in April 2017. NextSource Materials Inc. was founded in 2004 and is headquartered in Toronto, Canada.

How the Company Makes Money

NextSource Materials Inc. generates revenue through the extraction and sale of graphite from its Molo Graphite Project. The company earns money by supplying high-purity graphite materials to industries that require them for manufacturing batteries, electric vehicles, and other technological applications. Its revenue model is heavily reliant on mining operations, processing facilities, and the sale of processed graphite. Strategic partnerships with manufacturers and suppliers in the battery and energy sectors also play a critical role in its revenue generation, as these partnerships help to secure long-term sales contracts and expand market reach.

NextSource Materials Inc Financial Statement Overview

Summary

NextSource Materials Inc faces significant financial challenges with persistent operational losses, negative cash flows, and high leverage. While there have been some improvements in equity and revenue, the company needs to address its profitability and cash flow issues to ensure long-term viability.

Income Statement

The company has consistently generated negative gross profit, EBIT, and net income over the years, indicating significant financial challenges in achieving profitability. The revenue growth in TTM is notable but insufficient to offset ongoing losses. The persistent negative margins highlight a struggling operational environment.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio due to accumulating liabilities and negative equity in previous years. Although stockholders' equity has improved recently, the overall leverage remains high, posing financial risk. The equity ratio has seen some improvement, but stability remains a concern.

Cash Flow

Negative operating and free cash flows over the years reflect operational cash burn, with no free cash flow growth. The company remains heavily reliant on external financing to sustain operations. The cash flow to net income ratios are concerning, indicating cash flow challenges relative to income.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
51.59K	0.00	0.00	0.00	0.00	0.00
	Gross Profit
-560.01K	-239.00	0.00	-100.20K	-6.59K	-6.05K
	EBIT
-9.96M	-7.18M	-4.40M	-2.12M	-5.37M	-1.36M
	EBITDA
-9.14M	-7.37M	-4.58M	-2.56M	-5.52M	-1.36M
	Net Income Common Stockholders
-11.61M	-9.00M	-11.68M	-21.46M	-42.11M	-978.41K
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.32M	10.77M	6.89M	9.79M	22.44M	222.31K
	Total Assets
96.58M	92.85M	52.98M	29.30M	26.92M	273.44K
	Total Debt
21.66M	21.20M	11.50M	349.82K	11.10K	38.13K
	Net Debt
18.34M	10.43M	4.61M	-9.44M	-22.43M	-184.17K
	Total Liabilities
41.26M	40.55M	27.77M	32.36M	53.07M	1.18M
	Stockholders Equity
55.32M	52.30M	25.20M	-3.06M	-26.15M	-910.62K
Cash Flow		Free Cash Flow
-26.99M	-21.05M	-20.56M	-14.60M	-5.75M	-1.33M
	Operating Cash Flow
-13.06M	―	-7.05M	-1.63M	-1.43M	-1.33M
	Investing Cash Flow
-22.50M	-20.93M	-14.05M	-13.14M	-4.33M	306.72K
	Financing Cash Flow
6.85M	33.70M	18.46M	2.05M	27.83M	1.02M

NextSource Materials Inc Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.29
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:NEXT, the sentiment is Negative. The current price of 0.29 is below the 20-day moving average (MA) of 0.32, below the 50-day MA of 0.40, and below the 200-day MA of 0.63, indicating a bearish trend. The MACD of -0.04 indicates Negative momentum. The RSI at 33.08 is Neutral, neither overbought nor oversold. The STOCH value of 15.43 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:NEXT.

NextSource Materials Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LLG	60 Neutral	C$11.85M	1.07	-28.23%	―	―	―
GMA	51 Neutral	C$20.08M	―	-58.91%	―	-83.85%	-24.32%
Sector *	49 Neutral	$1.95B	-1.50	-22.00%	3.79%	0.66%	-27.40%
NOU	39 Underperform	C$383.70M	―	-70.44%	―	―	-13.44%
NEXT	38 Underperform	C$54.55M	―	-20.63%	―	―	-57.70%

NextSource Materials Inc Corporate Events

NextSource Materials Reports Strategic Progress Amidst Graphite Market Challenges

NextSource Materials Inc. has provided an update on its operations for the Molo Graphite Mine and battery anode facility development amidst challenging market conditions. Despite an oversupply in the graphite market and declining prices due to lower-than-expected EV demand and competition from synthetic graphite, the company remains committed to optimizing its operations. The company’s strategy includes ramping up production, optimizing processes, and securing strategic partnerships to align with the anticipated surge in global battery demand. These efforts are aimed at ensuring sustained capacity, reducing costs, and increasing economic feasibility to meet future market demands.

NextSource Secures $20 Million Credit Facility for Expansion

NextSource Materials Inc. has secured a US$20 million credit facility from Vision Blue Resources Limited to support the ramp-up and growth of its Molo Graphite Mine and advance its Battery Anode Facility strategy. This non-dilutive financing aims to enhance the company’s position in the battery materials market, with the facility structured to be drawn down in four tranches and carrying an interest rate of 15% per annum. As Vision Blue holds a significant stake in NextSource, this transaction is classified as a related party transaction but is exempt from minority shareholder approval.